As the second anniversary of the launch of regulated online casino and poker play in New Jersey approaches, the market that many predicted at launch is starting to emerge.

Despite myriad challenges – most notably payment processing, consumer education, and the decline in poker – New Jersey’s regulated online gambling market could generate over $150mm in revenue by the time 2015 winds down – a boost of 25% from 2014’s total.

New brands on the horizon – including PokerStars and MGM – could stoke additional interest.

Appearance of seasonality can be misleading

The chart above may suggest to some an impending seasonal dip for casino that will make the $150mm total difficult to hit.

But revenue from fall 2014 was adversely affected by both the exit of Ultimate Gaming and by a record-setting jackpot payout in November by Caesars.

Correcting for those two factors produces a chart with a relatively smooth revenue line through 3Q14.

Poker now stabilizing

New Jersey could push past the $150mm total and into $160mm territory – a 30% jump from 2014 – if poker starts pulling a bit more weight.

It’s reasonable to argue that NJ online poker has found a floor. Significant organic growth will be tough to come by, although the transition from summer to fall typically boosts poker traffic, and the broadcast of the World Series of Poker on ESPN should stimulate some interest.

When PokerStars enters NJ, we could see a temporary revenue boost lasting a few months on the poker side. Should that happen sooner than later, 2015 stands a much better chance of cracking the $160mm mark.

Account creation trends support continued growth

Critically, new account creation at NJ’s online gambling sites has remained healthy over the last few months, and enjoyed a surge in July:

Note that this is total accounts created, not total unique consumers.

I assume that more and more of these accounts are being created at casino sites as opposed to poker sites (there are more casino operators and poker account creation appears to be on the decline) – a positive scenario for the health of the overall NJ online gambling market.

If account creation were dipping notably, it would imply decreased support for continued growth.

Instead, what I see in the chart above is a product that is steadily making inroads among gamblers in the region – a sustainable growth trajectory that should pick up fuel from both growing efficiencies on the casino side and word-of-mouth on the consumer side.